Billionaire Shin Dong-joo has reason to be bitter. In the past couple of years, he’s been suspended by his father, fired by his younger brother and indicted on charges of embezzlement by South Korean prosecutors.
Yet the former No. 2 at Lotte Group says he’s confident he’ll clear his name in court, overthrow his brother as chairman and seize control of a business empire that generates more revenue than Google Inc. or Airbus Group. His plan is to take advantage of the group’s complex network of more than 70 cross shareholdings. If he can gain the votes of minority shareholders in one Japanese unit that binds the whole conglomerate together, he says he can effectively control the group.
“My final target is to take control of Lotte,” Shin, 62, said in his office in Seoul in his first interview with foreign media. “My brother and the current management destroyed (Lotte’s) good corporate culture.”
Shin is attempting to pull off a unique coup in Korean corporate history -- the takeover of one of the country’s giant family-run business groups, known as the chaebol. If he succeeds, he’ll take charge of the nation’s largest chain of shopping malls, duty-free stores, hotels and amusement parks, one whose overseas assets include Guylian Belgian chocolates and New York’s Palace Hotel.
Coup Attempts
It’s a big if. His brother Shin Dong-bin, chairman of Lotte Group, outguns him in terms of resources and has already fended off numerous coup attempts. The brothers’ given names will be used in this article for clarity.
“No coup has ever succeeded among the chaebol,’’ said Chung Sun-sup, CEO of Chaebul.com, a website that tracks the chaebol. He said Dong-joo’s best chance would be if his brother was convicted as a result of the investigation this year into corruption at the company. Dong-joo has also been charged but both brothers deny the allegations.
Meanwhile, the family feud is hurting Lotte and has added another stain to the embattled reputation of the chaebol groups this year, which have already suffered the bankruptcy of Hanjin Shipping Co., Samsung Electronics Co.’s exploding phones and an influence-peddling scandal that cost President Park Geun-hye her job.
The battle at Lotte is among the fiercest corporate power struggles in Asia -- rivaling the brawl raging atop India’s Tata Group -- as some of the region’s biggest dynasties undergo a once-in-a-generation leadership change.
Lotte was founded seven decades ago by Shin Kyuk-ho in Japan, where he had earlier attended Waseda University. He started out selling chewing gum and built a business empire in Japan and Korea. The two brothers grew up together in Japan, with the elder learning to run the Japanese units and the younger taking charge of the Korean part.